Jump to content
The Wifcon Forums and Blogs

Recommended Posts

Is this a claim?

“This letter serves as our request for cost modification in the amount of $50,325.00 for extended overhead due to delays outlined in our request for time extension letters dated 25 February 2005.”

That's all. Don't look up or cite any cases, just look at the statement and compare it to the definition of "claim":

“Claim” means a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract. However, a written demand or written assertion by the contractor seeking the payment of money exceeding $100,000 is not a claim under the Contract Disputes Act of 1978 until certified as required by the Act. A voucher, invoice, or other routine request for payment that is not in dispute when submitted is not a claim. The submission may be converted to a claim, by written notice to the contracting officer as provided in 33.206(a), if it is disputed either as to liability or amount or is not acted upon in a reasonable time.
Link to comment
Share on other sites

Guest jrt132

Yes based on the definition of a claim. The request is a written demand seeking payment of a certain sum. The request is using delays as the "matter of right."

Link to comment
Share on other sites

Maybe I'm quibbling, but I respectfully disagree with jrt132 based on the plain meaning of the words in the letter. This is, by its own terms, a "request" and neither a "demand" nor an "assertion." The contractor is asking, not insisting and not telling.

With almost no context, it's a tough call, but I would say it could go either way. A key question is: does the Contracting Officer want to handle it as a claim or not?

On one hand, if a contractor wants to submit a claim, it is incumbent on the contractor to make its case using clear, explicit, and unambiguous language. This letter doesn't quite get there. In my experience it's best to write to a Contracting Officer using words straight out of the contract clauses and the governing FAR guidance, framing the issues in terms I choose, to point toward an answer I want.

On the other hand, this letter is a follow-up to previous requests, so it could be seen as taking the situation out of the land of equitable adjustments and into the land of claims, possibly imposing a duty on the Contracting Officer to handle it as a claim, or maybe simply motivating the Contracting Officer to close this matter with a Final Decision.

Either way, I would document the file with my take on the request and the reasons for it, and go from there.

Before documenting the file, my next step would be, as is my wont, to look this up, first to RTFC (in polite language, read the f-f-f-full contract), then the pertinent points in the rest of the FAR and any applicable agency supplements, and if that's not enough, hit the rest of the books. But that's beyond the scope of this discussion.

Link to comment
Share on other sites

This is not a routine request for payment. It may be a trick question due to the fact that the request is based upon letters that are dated 2005, which is over 9 years ago. Assuming that the dates are not relevant here for Don's question and assuming that there hasn't been some recent case law that redefines a claim, I think that this is a claim. See this archived thread from the Forum in 2000 at http://www.wifcon.com/arc/forum520a.htm

Ok, Don said not to look up any cases but to just look at the definition. Assuming that the dates matter, It may be a continuing chain of correspondence for a nine year old claim or it may be an attempt to claim nine years after the fact.

Link to comment
Share on other sites

My first thought? Not a claim...

Like Cajuncharlie, it is a request, not a demand or assertion. But even though it is styled as a request, it might stil be a claim depending on the history.

If there is no history, and if this submission came in out of the blue, so to speak, well, the matter of right is not is not established. If the contractor's right to payment is covered by a contract clause, one supposes the "claim" would reference that clause. Is the entitlement under the Government Delay of Work clause? The "claim" doesn't establish this as its matter of right. If it did, para. ( B ) of the clause at FAR 52.242-17 might preclude payment.

Was the matter in dispute when the submission was made? If not, this isn't a claim.

Given no other information, as a contracting officer I would try to discern if maybe this is merely an issue in controversy, as that term is defined in FAR Subpart 33.2.

Link to comment
Share on other sites

Guest Vern Edwards

I've always said that the average CO wouldn't know and be able to acknowledge a claim if it jumped up and bit him on the butt. Right again.

There's no trick. Read Don's instruction: "[J]ust look at the statement and compare it to the definition of 'claim'," because that's what the courts and boards do and so should COs, since the definition is in every contract that includes the Disputes clause, and is contractually binding.

Link to comment
Share on other sites

Guest Vern Edwards

Yes based on the definition of a claim. The request is a written demand seeking payment of a certain sum. The request is using delays as the "matter of right."

The letter is not seeking payment. It is asking for an adjustment to the contract price.

Link to comment
Share on other sites

Guest Vern Edwards

A key question is: does the Contracting Officer want to handle it as a claim or not?

A CO doesn't get to choose how to handle it. If it's a claim, then the CO must handle it as a claim, because he's contractually obligated to do so. If it's not a claim, then he need not handle it as a claim.

Link to comment
Share on other sites

I would say no, it is not a claim, but quite close. Well, it doesn't appear to me that it requests a decision of the Contracting Officer, which is something that I typically expect to see in a claim. Although implicit by the fact that they sent a letter, when it comes down to it, they don't actually request a Contracting Officer's decision.

Link to comment
Share on other sites

It isn't a claim if the contractor didn't request the cost modification for more than 9 years after it requested a time extension in February 2005, which is most likely more than 6 years after the accrual of the "claim". It is now March 2014. There is no other information provided to assume when the claim was submitted.

Don provided this link in his initial post: 3.206(a), which is "Initiation of a Claim".

"(a) Contractor claims shall be submitted, in writing, to the contracting officer for a decision within 6 years after accrual of a claim, unless the contracting parties agreed to a shorter time period. This 6-year time period does not apply to contracts awarded prior to October 1, 1995. The contracting officer shall document the contract file with evidence of the date of receipt of any submission from the contractor deemed to be a claim by the contracting officer."

Link to comment
Share on other sites

Guest Vern Edwards

Don said to compare the letter to the definition of claim.

Does the definition of claim say anything about a written demand or assertion having to be submitted to the CO within a specified period of time? No.

Does FAR 33.206 say that a written demand or assertion that meets the criteria for a claim in the definition of claim is not a claim if not submitted within six years after accrual? No.

It might be an untimely claim, or late claim, but if it meets the criteria in the definition it's a claim.

Link to comment
Share on other sites

Guest Vern Edwards

Retread:

Yes, it would have to be certified, but not based on the language of the FAR definition. The FAR definition says that demands or assertions "seeking the payment of money" have to be certified, thus, the plain language excludes demands or assertions for price adjustments.

But the Contract Disputes Act of 1978 does not use the phrase "seeking the payment of money", and it does not say that a written demand or request exceeding $100,000 is not a claim until certified. The statute, at 41 U.S.C. § 7103( b ), says:

( b ) Certification of Claims.—

(1) Requirement generally.— For claims of more than $100,000 made by a contractor, the contractor shall certify that—
(A) the claim is made in good faith;
( B ) the supporting data are accurate and complete to the best of the contractor’s knowledge and belief;
( C ) the amount requested accurately reflects the contract adjustment for which the contractor believes the Federal Government is liable; and
(D) the certifier is authorized to certify the claim on behalf of the contractor.
(2) Who may execute certification.— The certification required by paragraph (1) may be executed by an individual authorized to bind the contractor with respect to the claim.
(3) Failure to certify or defective certification.— A contracting officer is not obligated to render a final decision on a claim of more than $100,000 that is not certified in accordance with paragraph (1) if, within 60 days after receipt of the claim, the contracting officer notifies the contractor in writing of the reasons why any attempted certification was found to be defective. A defect in the certification of a claim does not deprive a court or an agency board of jurisdiction over the claim. Prior to the entry of a final judgment by a court or a decision by an agency board, the court or agency board shall require a defective certification to be corrected.
See also FAR 33.207(a) which requires certification of "any claim" exceeding $100,000, and the Disputes clause, FAR 52.233-1(d)(2)(i), which requires certification of "any claim" exceeding $100,000.
So, according to the statute and other sections in FAR, any written demand or request stated in monetary terms in excess of $100,000, whether for payment or price adjustment, must be certified before the CO is obligated to render a final decision.

The definition of claim in FAR is inexplicable. The courts have added to the confusion by issuing carelessly written decisions. For a superb discussion of the problem of defining "claim", see "A Retrospective on the Contract Disputes Act," by W. Stanfield Johnson, Public Contract Law Journal (Summer 1999), 28 Pub. Cont. L.J. 567. In that article, Stan pointed out that 20 years after the enactment of the CDA, "Affter repeatedly revisiting the subject in litigation, regulation, and statutory amendment, we are still not completely certain what 'claim' means."

​I'm pretty certain that I know what it means, because I have steeped myself in the case law and can read plain English. But I can tell you that most COs and contractors don't have a clue, which is why the issue keeps coming up in court and why Don started this thread. But I'm going to let him answer his own question and wrap things up.

Link to comment
Share on other sites

A claim only if submitted by the prime contractor or the Government to the other party.

1) Written demand or assertion – Yes

2) By prime or Government – Unknown

3) Sum Certain - Yes

4) Relief pursuant to terms of the contract - Yes

5) Certification - Not required per the “claim” definition clause

Link to comment
Share on other sites

Guest Vern Edwards

No, it appears to be a REA rather than a claim.

The REA/claim distinction is false. There is no categorical difference between an REA and a claim. An REA that meets all of the criteria for a claim is an REA that's a claim. An REA that does not meet any of the criteria is an REA that is not a claim. That has been long and well-established in the case law.

There are some who think that an REA that meets the criteria for a claim should not be called an REA. That is perhaps sound advice, but that's all it is -- advice.

Link to comment
Share on other sites

Our command's process for REAs states; "Verify that Contractor's letter clearly states that the request is an REA (versus a contract claim)." And, "Immediately obtain written clarification from the Contractor if the Contractor’s letter does not clearly identify whether the request is an REA or a claim." Also, DFARS 243.204-70 talks about converting the request (REA) to a claim under the contract disputes act.

Maybe it's a distinction without a difference? But unless I knew the contractor's intent was to file a claim and that there was an actual dispute, I would have assumed it was a REA. You learn something new every day.

Thanks Vern!

Link to comment
Share on other sites

The Court of Federal Claims said that it was a claim. See K-CON Building Systems, Inc., v. U.S. In relevant part:

In granting plaintiff’s motion, the court rejects defendant’s contention that the court lacks jurisdiction over plaintiff’s proposed claim. Specifically, defendant argues that plaintiff’s February 25, 2005 request for a price adjustment cannot constitute a valid claim under the CDA because plaintiff did not, in its letter, make a demand or indicate that it was seeking a final decision from the contracting officer. Defendant’s interpretation of the CDA’s requirements is too narrow. According to binding Federal Circuit precedent, there is “no requirement in the [CDA] that a ‘claim’ must be submitted in any particular form or use any particular wording.” Contract Cleaning Maint., Inc., 811 F.2d at 592; see also Transam. Ins. Corp. v. United States, 973 F.2d 1572, 1578 (Fed. Cir. 1992) (noting that “certain ‘magic words’ need not be used and that the intent of the ‘claim’ governs”). “All that is required is that the contractor submit in writing to the contracting officer a clear and unequivocal statement that gives the contracting officer adequate notice of the basis and amount of the claim.” Contract Cleaning Maint., Inc., 811 F.2d at 592. Thus, the contractor’s request for a decision from the contracting officer need not be explicit; it may be implied. James M. Ellett Constr. Co. v. United States, 93 F.3d 1537, 1543 (Fed. Cir. 1996); see also Transam. Ins. Corp., 973 F.2d at 1576 (“The statute’s broad language demonstrates that as long as what the contractor desires by its submissions is a final decision, that prong of the CDA claim test is met.”). Although plaintiff’s February 25, 2005 letter is terse, plaintiff clearly indicates that it is a “request” for extended overhead based on the delays it alleged in its other three February 25, 2005 letters. Not only is plaintiff’s “request” tantamount to a demand, but any reasonable contracting officer receiving plaintiff’s letter would have interpreted it as a request for a decision regarding plaintiff’s entitlement to extended overhead. In fact, it bears noting that Ms. Hundley rendered decisions in response to plaintiff’s other three February 25, 2005 letters, all of which contained language similar to the letter at issue (each of the three letters began, “[t]his letter serves as our request for time extension,” and each concluded, “[t]herefore [plaintiff is] requesting a non-compensable time extension” ).
Link to comment
Share on other sites

Guest Vern Edwards

Our command's process for REAs states; "Verify that Contractor's letter clearly states that the request is an REA (versus a contract claim)." And, "Immediately obtain written clarification from the Contractor if the Contractor’s letter does not clearly identify whether the request is an REA or a claim." Also, DFARS 243.204-70 talks about converting the request (REA) to a claim under the contract disputes act.

Maybe it's a distinction without a difference? But unless I knew the contractor's intent was to file a claim and that there was an actual dispute, I would have assumed it was a REA. You learn something new every day.

Thanks Vern!

Actually, your command has issued an excellent instruction, and here's why it's excellent: Most contractors don't know the difference between an REA that is a claim and an REA that is not a claim. Many mistakenly think that there is a categorical difference. It's important that they know, because if they submit an REA that is a claim they cannot charge claim preparation and legal costs to the Government, see FAR 31.205-47(f)(1). But if they submit an REA that is not a claim, then they can charge those costs to the Government.

If a contractor writes a letter to a CO asking for a monetary equitable adjustment in an amount of $100,000 or less, the letter might meet all of the criteria for a claim, but the contractor might not have intended to submit a claim. (A claim does not have to say that it is a claim.) If the letter seeks more than $100,000, then the CO does not have to treat it as a claim, even if the letter says it is a claim, unless the contractor certifies it as a claim. If the contractor certifies it as a claim, then the contractor's intent should be pretty clear.

What I tell COs is that when they get a letter seeking an equitable adjustment that meets all the criteria of a claim, including certification, and if they are not sure that the contractor understands what a claim is and what the cost consequences are of submitting a claim, then the CO should contact the contractor to verify that they intended to submit a Contract Disputes Act claim. The CO should explain why he's asking, pointing out that if submitting a claim they cannot charge claim preparation costs and associated legal costs to the Government. (At today's interest rates, those costs might easily exceed any interest earned on the claim.) The CO should handle it as a claim until told that the contractor had not intended to submit one. If the contractor says that they had not intended to submit one, then the CO should ask for immediate confirmation in writing and continue treating it as a claim until he receives the confirmation. You probably don't have to do that with Lockheed or Boeing, but you ought to do it with smaller companies who might not know the ropes.

A dispute is not a prerequisite to a claim, unless the contractor has submitted an invoice, voucher, or other routine request for payment. REAs are not routine requests for payment. See Reflectone v. Dalton, 60 F.3d 1572 (Fed. Cir. 1995). Claim and dispute are not synonymous.

Link to comment
Share on other sites

So does the statement in question provided by Don demand or indicate that the entity is seeking a final decision from the contracting officer?

It does not, therefore it is not a claim. It is a request for equitable adjustment, based on what authority for such an adjustment, I have no idea because that is not stated.

I would be cautious calling the Contractor to ask them what they intend, especiall because of the direction that the conversation could take. I'm not in the business of advising the Contractor of the finer points of writing their claims or REAs. Perhaps at some point in private employment I will have that opportunity.

I had a similar incident occur, except that the letter I received was for a sum certain amount over $100K, it included the certification language, and it cited the contract's "Notification of Changes" clause as the authority for what it was seeking. Their initial submission did not state either way that it was an REA or a claim, although it had all but one component. What it was lacking was a request for a written decision by the Contracting Officer, however, it was implied. By default I sent a letter to the Contractor informing them that I was in receipt of their claim and that they would receive a written decision from the Contracting Officer no later than a date certain; they replied with 'wait, wait, wait, this is an REA, not a claim'. I amended the letter to the Contractor, and the Government processed it as an REA. The reason that the Contractor wanted an REA rather than a claim was so that the Contractorould negotiate the adjustment with the Government rather than just receive a decision. Fair enough. The understanding was that at any time they could request a written Contracting Officer's decision within 60 days, which would trigger me to set a date certain for a later date, and that by that date the Contracting Officer's written decision would be issued.

Quite the dicey process.

The Court of Federal Claims said that it was a claim. See K-CON Building Systems, Inc., v. U.S. In relevant part:

Quote

In granting plaintiff’s motion, the court rejects defendant’s contention that the court lacks jurisdiction over plaintiff’s proposed claim. Specifically, defendant argues that plaintiff’s February 25, 2005 request for a price adjustment cannot constitute a valid claim under the CDA because plaintiff did not, in its letter, make a demand or indicate that it was seeking a final decision from the contracting officer. Defendant’s interpretation of the CDA’s requirements is too narrow. According to binding Federal Circuit precedent, there is “no requirement in the [CDA] that a ‘claim’ must be submitted in any particular form or use any particular wording.” Contract Cleaning Maint., Inc., 811 F.2d at 592; see also Transam. Ins. Corp. v. United States, 973 F.2d 1572, 1578 (Fed. Cir. 1992) (noting that “certain ‘magic words’ need not be used and that the intent of the ‘claim’ governs”). “All that is required is that the contractor submit in writing to the contracting officer a clear and unequivocal statement that gives the contracting officer adequate notice of the basis and amount of the claim.” Contract Cleaning Maint., Inc., 811 F.2d at 592. Thus, the contractor’s request for a decision from the contracting officer need not be explicit; it may be implied. James M. Ellett Constr. Co. v. United States, 93 F.3d 1537, 1543 (Fed. Cir. 1996); see also Transam. Ins. Corp., 973 F.2d at 1576 (“The statute’s broad language demonstrates that as long as what the contractor desires by its submissions is a final decision, that prong of the CDA claim test is met.”). Although plaintiff’s February 25, 2005 letter is terse, plaintiff clearly indicates that it is a “request” for extended overhead based on the delays it alleged in its other three February 25, 2005 letters. Not only is plaintiff’s “request” tantamount to a demand, but any reasonable contracting officer receiving plaintiff’s letter would have interpreted it as a request for a decision regarding plaintiff’s entitlement to extended overhead. In fact, it bears noting that Ms. Hundley rendered decisions in response to plaintiff’s other three February 25, 2005 letters, all of which contained language similar to the letter at issue (each of the three letters began, “[t]his letter serves as our request for time extension,” and each concluded, “[t]herefore [plaintiff is] requesting a non-compensable time extension” ).
Link to comment
Share on other sites

Guest Vern Edwards

So does the statement in question provided by Don demand or indicate that the entity is seeking a final decision from the contracting officer?

It does not, therefore it is not a claim.

Gee, Dingoes, did you miss the part in the quote Don provided from the court decision in which the court said:

Thus, the contractor’s request for a decision from the contracting officer need not be explicit; it may be implied.

and then found that the request was implicit and that a reasonable CO would find it so? Or are you just ignoring it? Or do you not know the meaning of implicit?

In case that quote isn't clear enough for you, here is one from the Federal Circuit Court of Appeals:

To be a claim under the CDA, the submission must request a “final decision.” See Ellett, 93 F.3d at 1543. A request for a “final decision,” however, need not be “explicit.” Id. That the contractor intended to make such a request could be “ ‘implied from the context of the submission.’ ” Id. (quoting Heyl & Patterson v. O;Keefe, 986 F.2d 480, 483 (Fed.Cir.1993)).

Rex Systems, Inc. v. Cohen, 224 F.3d 1367 (Fed. Cir. 2000). See, too, Cibinic, Nash and Nagle, Administration of Government Contracts 4th, pp. 1267 - 68:

​The requirement that the contractor request a contracting officer decision is in neither the CDA nor the FAR but rather derives from case law… The request for a decision may be either explicit or implied.

Now, do you disagree with the Court of Federal Claims or the Federal Circuit Court of Appeals or both, or do you think that the letter did not even request a decision implicitly?

The only thing that makes the process dicey is that so many people involved in it don't know the law and refuse to learn. Actually, the process could not be simpler.

Link to comment
Share on other sites

Going back to Tap's posts, another point to keep in mind for DoD contracts is the requirement that REAs above the SAT require certification in accordance with DFARS 252.243-7002. This is a different certification than the one required for a claim. If a contractor submits an REA with the REA certification, then wishes to convert the REA to a proper Disputes clause claim, it must recertify using the Disputes clause certificate.

Link to comment
Share on other sites

Guest
This topic is now closed to further replies.
 Share

×
×
  • Create New...